Brussels, 30/05/2002 (Agence Europe) - The European Parliament, which was not consulted on the issue, adopted by 287 votes to 128 and 43 abstentions the report by German Christian Democrat Christoph Konrad on the proposed amendment to the regulation which hitherto allowed the automobile sector to enjoy exceptions to the ban on vertical agreements and concerted practices, which restricted competition. The Parliament on the whole approves the approach of the European Commission which hopes to develop competition and facilitate the choice of consumers by reducing the scope of the exemption enjoyed by the sector under Article 81 paragraph 3 of the Treaty. It hopes, however, that the Commission's project will be modified on several points in order to guarantee the protection of consumers before all else, as well as the timelessness and the quality of the link between sales and after-sales services, and also the development of a wider choice of makes at one and the same sales location. Regarding the central point of the reform envisaged by Commissioner Monti, namely the defragmentation of geographic markets guaranteeing the possibility for traders to gain a business footing in other Member States, the Parliament expresses concern about the consequences that this measure could have on SMEs and calls for the change not to take effect until 1 October 2005 instead of October 2003. It also considers, contrary to the opinion expressed by Commissioner Monti during the debate that this would reduce legal security, that the abolition of all territorial restrictions should not come before further Commission evaluation. He noted that it is not possible to guarantee effective competition in the sector without this measure. EUROPE recalls that the current block exemption regulation applicable to distribution in the automobile sector expires on 22 September 2002.
During the debate, Mr Konrad felt the new regulation would strengthen the position of small and medium-sized companies in the sector and allow greater liberalisation of distribution structures. He took a stance, however, in favour of a longer transition period. "We shall support the reform proposals by giving you a large majority", Commissioner Monti announced before calling on the sector to adjust to a situation that will no longer be characterised by exemption to the law on competition. Austrian national Othmar Karas (ÖVP) gave the support of the EPP-ED Group to revision of the regulation by taking a stance in favour of a smooth transition. German Social Democrat Bernhard Rapkay, speaking on behalf of the PES Group, gave his support to the compromise reached in committee but asked whether the reform proposed by Commissioner Monti would really allow competition to be introduced. He feared that SMEs in the sector would disappear by being "eaten up by the bigger firms", which would result in even less competition than today. Danish Liberal Karin Riis-Jorgensen called on the Commissioner to remain firm and not to listen to the Parliament majority, in order to guarantee the interest of consumers. For the GUE/NGL Group, French national Philippe Herzog defended the small and medium-sized companies against the large distributors and regretted that the link between sales and after-sales had been broken. Most speakers thanked Mr Monti for his availability in this connection and the quality of the dialogue that they had had with him.
Commissioner Mario Monti recalled that it was a matter of guaranteeing the interests of consumers by strengthening competition within the internal market. The reactions of consumer associations, repairers and manufacturers of spare parts were extremely positive, said Mr Monti, who expressed great surprise at the criticism voiced by some industrial circles. "We are fully convinced of the advantages inherent to this new regulation", he added, saying that he placed his trust in the dealers who are familiar with the needs of consumers. While pointing out that he understands the aims of the transition advocated by the parliamentary committee, Mr Monti felt it is not appropriate to create uncertainty by foreseeing a study although he does remain willing to examine a slightly longer transition period. (See also yesterday's EUROPE, pages 10 and 13, and 24 May, p.14).
As is foreseeable in such a controversial issue, the reactions of MEPs to the final voting result differed considerably. Thus, according to the rapporteur, Christoph Konrad, the vote of the Parliament opens the road to liberalisation and represents a clear support to the Commission's proposals. It must now be hoped that there will be an objective discussion between the Commission and Member States, said the German MEP. On the other hand, British Conservative Theresa Villiers spoke of a "bad day for consumers". The Parliament "today caved in to the demands of the German car industry, calling for a review and postponement of reform proposals which would have resulted in cheaper car prices in the UK", regrets the MEP. The Commission must go forward with its reform without further delay, she said.